Eleventh Circuit Denies Arbitration oin Payday Loan RICO Suit
On February 24, 2016, Stueve Siegel attorneys and their co-counsel prevailed in the U.S. Court of Appeals for the Eleventh Circuit when the Eleventh Circuit affirmed a Georgia district court's decision denying the defendant bank's motion to compel arbitration. The lawsuit alleges that First Premier Bank violated the laws of multiple states and the Racketeer Influenced and Corrupt Organizations (RICO) Act by knowingly partnering with illegal online payday lenders to provide them direct access to borrowers’ bank accounts in states that outlaw payday loans.
The Eleventh Circuit agreed with the district court that the arbitration provision First Premier Bank sought to enforce compelled the parties to arbitrate exclusively before the National Arbitration Forum (NAF), an entity that stopped accepting consumer arbitration claims in 2009. The Eleventh Circuit held that “[b]ecause the choice of the NAF as the arbitral forum was an integral part of the agreement to arbitrate, we conclude that the district court properly denied First Premier’s motion to compel arbitration and appoint a substitute for NAF, and to stay or dismiss the proceedings.”
The plaintiff will now be free to pursue her claims in federal court.
Stueve Siegel attorney Darren Kaplan was quoted in a Bloomberg BNA article about the decision:
"While we are not surprised with this ruling, we are certainly pleased that the Eleventh Circuit Court of Appeals has affirmed the district court's denial of the defendant's motion to compel arbitration, and we look forward to litigating this class-action case on the merits."
To read the full article,click here
To read more about Darren Kaplan, click here
Reproduced with permission from Daily Report for Executives, 37 DER (Feb. 25, 2016). Copyright 2016 by The Bureau of National Affairs, Inc. (800-372-1033) <http://www.bna.com>